The art market

A pretty picture

Why Indian modern art is booming

IT IS not just Indian software and “business-process outsourcing” firms that are benefiting from the rise of the internet. Indian modern art is also on an upward spiral, driven by the aspirations of newly rich Indians, especially those living abroad, who use the internet to spot paintings and track prices at hundreds of gallery and auction websites. Prices have risen around 20-fold since 2000, particularly for prized names such as Tyeb Mehta and F.N. Souza.

There would have been “no chance” of that happening so fast without the internet, says Arun Vadehra, who runs a gallery in Delhi and is an adviser to Christie's, an international auction house. He expects worldwide sales of Indian art, worth $200m last year, to double in 2006. It is still a tiny fraction of the $30 billion global art market, but is sizeable for an emerging market.

For newly rich—often very rich—non-resident Indians, expensive art is a badge of success in a foreign land. “Who you are, and what you have, are on your walls,” says Lavesh Jagasia, an art dealer in Mumbai. Indian art may also beat other forms of investment. A painting by Mr Mehta that fetched $1.58m last September would have gone for little more than $100,000 just four years ago. And a $22m art-investment fund launched in July by Osian's, a big Indian auction house, has grown by 4.1% in its first two months.

Scant attention was paid to modern Indian art until the end of the 1990s. Then wealthy Indians, particularly those living abroad, began to take an interest. Dinesh Vazirani, who runs Saffronart, a leading Indian auction site, says 60% of his sales go to buyers overseas.

The focus now is on six auctions this month. Two took place in India last week; work by younger artists such as Surendran Nair and Shibu Natesan beat estimates by more than 70%. Sotheby's and Christie's have auctions in New York next week, each with a Tyeb Mehta that is expected to fetch more than $1m. The real question is the fate of other works, including some by Mr Souza with estimates of up to $600,000. If they do well, it will demonstrate that there is strong demand and will pull up prices across the board. This looks like a market with a long way to run.